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9.18 pm

The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms): I congratulate my hon. Friend the Member for Wakefield (Mr. Hinchliffe) on securing the debate. He has been very energetic in voicing local concerns about the post office closure proposals on behalf of his constituents, and he made a powerful speech this evening, not least when citing the name of Walter Harrison in support of his case. He tabled a number of parliamentary questions on the subject over the past few weeks, and I endeavoured to answer them—albeit not, as he made clear, entirely to his satisfaction.

My hon. Friend has clearly spelled out his views and concerns about the impact of the post office closures that will shortly take place in his constituency and about the consultation process that preceded those decisions. I am grateful to him for accepting the need for change. He said that he was concerned about the process of marketisation, but I would make the point that sub-post offices have always been private businesses—for more than 100 years, going right back to the beginnings of the Post Office. Those who run sub-post offices as private businesses must be able to make a reasonable living, and it is part of the Government's responsibility to ensure that that occurs. That provides an important part of the background to the process of change that we are currently going through.

I agree with my hon. Friend, for precisely the reasons that he set out, about the importance of maintaining a viable nationwide network of post offices. It is important that sub-post offices and their proprietors, the sub-postmasters and sub-postmistresses, are able, as they always have, to provide strong support to vulnerable individuals among their customers. My hon. Friend is right to make that point, which is one of the reasons why it is important that the Government maintain a viable nationwide network of post offices and stop unmanaged gaps from opening up in that network.

The starting point of our policy for the network is the performance and innovation unit's 2000 report, with which my hon. Friend will be familiar, "Modernising

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the Post Office Network". It was widely welcomed as squaring up honestly and finally to the challenges that the network faces. It made 24 recommendations for the future, all of which the Government accepted. The PIU report showed quite starkly that our network of post offices had not kept pace with the changing needs of its customers, and that too often post offices had become dingy and shabby through lack of investment, as a result of which the network was losing business.

The Post Office faces an enormous challenge. For the last financial year, Post Office Ltd. lost £194 million before exceptional items. In the previous year, it lost £163 million. About 97 per cent. of the nation's post offices are private businesses run by sub-postmasters, but with declining profitability in the network as a whole—and, in very many cases, at individual office level—the ability of those sub-postmasters to sell on their businesses has also declined. That is how they often moved on in the past, but it has taken a very severe knock. Decisive action was needed to ensure that we maintained a sustainable countrywide network for the future, which is the action that the Government have been taking.

My hon. Friend knows that the post office network has been contracting since the 1960s. There have been reductions in post office usage for all sorts of reasons, and the absence of investment in the past was an important one, but big changes in technology, greater mobility, changes in shopping and financial habits have all meant that a large proportion of all our constituents are simply not using the post office in the way that they used to—and custom has sharply reduced as a result.

Before responding to some of my hon. Friend's points, I mention some telling comparative figures. In 1996, 26 per cent. of benefit recipients received their cash paid directly into their bank accounts; in April last year, just before the transition to direct payments started, that proportion had risen to 43 per cent. In quite a short period, dramatic reductions in the use of the post office network took place, which we needed to take into account.

If we want an urban post office network that is the right size for the volume of business now available to it, there have to be—in addition to the new technology and the introduction of banking facilities that my hon. Friend welcomed—closures in the urban network. I do not know whether my hon. Friend feels that a different set of four sub-post offices should have been proposed for closure, but that was the key question facing the Post Office and Postwatch in embarking on this exercise.

I gather that, at the start of the programme, there were 31 post offices in my hon. Friend's constituency, of which 13 were classified by Post Office Ltd. as urban. Last September, Post Office Ltd decided to prepare closure proposals on an area plan basis, using the parliamentary constituencies grouped together, where appropriate, to give a clearer, "once over the ground" view of future service provision. I take my hon. Friend's point about the awkwardness of the date of 29 December, but he will appreciate that announcements are continually being made, given the scale of the exercise. Nevertheless, he makes a fair point about the

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date on which the area plan was published. There were four closure proposals in respect of the branches that he has mentioned.

Postwatch considered each of the proposals carefully before concluding that, in this case, there were insufficient grounds to oppose them. It therefore chose not to refer the four proposals to the escalation and review process. I have looked at Postwatch's comments, and in all four cases it accepted that there was not enough business for the branches to remain viable. In each case, there is an alternative office located within half a mile or so. Postwatch draws attention to one important consideration. In its view, the closure of two branches—Agbrigg road and Haddingley Hill—enabled the strengthening, and therefore the long-term viability, of two other offices in designated deprived urban locations that are not too far away, and which might otherwise themselves have been at risk.

Mr. Hinchliffe: I am listening carefully to what the Minister is saying, but Agbrigg road in particular has heard it all before. Exactly the same arguments were advanced when people were relocated from Doncaster road. Will he address my concern about what happens when people have to relocate and to use the general post office? My secretary took four huge parcels to the general post office yesterday, and she had to queue for half an hour in order to send them here by registered post. People regularly have to queue there for half an hour. It simply is not on when people in their 80s have to wait that long to access a service.

Mr. Timms: I accept my hon. Friend's point entirely, but I should point out that two post offices in his constituency—the Kirkgate and Windhill road branches—have submitted applications for improvement grants from the Office of the Deputy Prime Minister. Up to £50,000 can be applied for in such cases; however, the results of those applications have yet to be determined. The programme provides an opportunity to improve other branches, in order to help them to cope with the additional custom that they will receive.

My hon. Friend mentioned the delay that he suffered in being informed of the proposals, and I shall certainly ask the Post Office what happened. He said that the letter was sent to the wrong address, and I entirely sympathise with his anger at finding out about these proposals through the local press. That certainly should not happen and it is not the Post Office's intention; I shall endeavour to find out what went wrong. This may not be of much comfort to my hon. Friend, but in response to a number of problems that are not dissimilar to the ones he described, I told the House in a statement of 5 February about some changes to the consultation process. They include the requirement that Members of the House be informed one week before these proposals go out to wider public consultation. I hope that that will help to avoid other Members facing the difficulties that he has faced through finding out so late. Such changes reflect my concern that the reasoning behind the decisions being taken was not being explained as clearly as it should have been. I think that the changes announced in my statement on 5 February have helped.

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My hon. Friend expressed some concerns about disabled access and the facilities in post offices. The Post Office is taking action to meet the requirements, as it has to, of the Disability Discrimination Act 1995. Disability awareness training, for example, has been provided to all staff. In a number of branches, drop-down counters, electronically aided doors and mobile hearing induction loops are being installed. I understand that a number of those measures are to be taken in my hon. Friend's constituency.

Mr. Hinchliffe: There are only a couple of minutes left. One of the key points to which I wanted my hon. Friend to respond was the fundamental flaws and inaccuracies in the consultation document. The nature of the areas that the sub-post offices served was assessed wrongly. Will my hon. Friend address that point?

Mr. Timms: Yes. I am not able to explain to him how Dewsbury road was described as a rural road, given what he has said. I can only say to my hon. Friend that I will take that away and find out what happened.

I am satisfied, and certainly the experience across the country is, that Postwatch scrutinises all the proposals thoroughly and rigorously. If Postwatch concludes that the proposals are wrong—on the basis of walking around the area and having a look at it—it does not hesitate to oppose the closures that have been proposed. On this occasion, its view was that the proposals, although there were some issues that should be looked at, should not be opposed.

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Let me also respond to the point about queueing times. He has tabled parliamentary questions about that with regard to the main Crown office in Wakefield. He described his secretary's experiences there recently. I understand that the office is not expected to be the main receiving branch for much of the custom migrating from the offices that will close, but Post Office Ltd will monitor the position at that office very carefully and, if it needs to, will flex the staffing times or increase the staffing hours to meet additional demand.

My hon. Friend expressed concerns about Postwatch. I say to him again that Postwatch has been vigorous and forthright. Indeed, it was the concerns articulated to me by Postwatch as well as several Members of Parliament that convinced me of the need to review the consultation arrangements urgently and led to the changes that I announced on 5 February, which I hope will ensure that problems of the kind that my hon. Friend has suffered will not occur in the future.

Like my hon. Friend, Postwatch has recognised from the beginning of the exercise that action is needed to ensure the future survival and viability of the network. It accepted that, with too many post offices competing for the same customers in many urban areas, it would not be possible to oppose every individual closure where it was clear that customers would have—

The motion having been made after Seven o'clock, and the debate having continued for half an hour, Madam Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.


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